System and method for conducting secure commercial order transactions

Abstract

The inventive system and method enable secure remote commercial order transactions between customers and merchants. The inventive system and method ensure that customer entire confidential financial data (CFD) is never transmitted to the merchant by keeping that CFD proprietary to the customer's exiting financial service provider (FSP) with which the customer has established a financial account, and from which the merchant is authorized to receive payments. When an order is placed, the customer provides to the merchant a partial CFD (PCFD) sufficient, along with additional data, to identify the FSP to the merchant, and to identify the customer to the FSP. The merchant then provides the PCFD, along with at least partial order data, to the FSP, and order confirmation data (OCD) to the customer. Various embodiments of a novel order verification process are also provided that enable authorization, by the customer, of the order through contact between the customer and the FSP. In this manner, the complete CFD is kept absolutely secure as it never leaves the possession of the customer and the FSP. Optionally, the FSP is given the opportunity to offer additional services and / or products to the customer during order authentication, that are related or unrelated to the order. Advantageously, the inventive system and method function equally well for interactive electronic (e.g., online) orders, telephone orders, mobile commerce orders, facsimile orders, mail-order orders, and even in-person orders.

Description

FIELD OF THE INVENTION [0001] The present invention relates generally to a system for enabling commercial transactions that may occur remotely, for example, over one or more communication networks, and more particularly to a data processing and communication system for enabling customers placing orders with merchants to conduct secure payment transactions therewith. BACKGROUND OF THE INVENTION [0002] The development of the Internet as an enabler for information, communication, efficiency and commerce over the past decade has been an advance that is unparalleled in our society. In commerce, in particular, over two hundred billion dollars have been spent on Internet purchases (by consumers and businesses) in the last year alone, and there is no end in sight for the continued dramatic growth that is expected in the coming years. The proliferation of relatively inexpensive and powerful personal computers, as well as ready availability of inexpensive high speed Internet access, have furt...

AI Technical Summary

Benefits of technology

[0037] The present invention accomplishes the above goals by: (1) ensuring that the complete CFD is never transmitted to the merchant, and in fact is not even necessary for order placement, and by: (2) separating the order process into the stages of order placement and order verification, where the verification of the order is made by the customer's financial service provider (FSP)—a party that has always been in possession of the customer's CFD. Advantageously, the inventive system and method also provide FSPs with the opportunity to offer one or more products and / or services to the customer during the order verification process, and also with a unique opportunity to offer certain services when customers are in dire need thereof (e.g., credit line increases, loans, etc.).

Problems solved by technology

At the same time, conventional mail-order, facsimile, and telephone-based commercial transactions (and especially non-interactive television-based home shopping) have declined somewhat but certainly not to the degree commensurate with the expected decline due to the proliferation of on-line ordering capabilities.

Notwithstanding the tremendous growth in availability of on-line offerings of products and services, there has been a very significant challenge (and in some cases, barrier) to continued success and growth of on-line commerce—the escalating growth of fraudulent on-line transactions.

But fraudulent on-line transactions are only a part of the problem—the true risk of on-line commerce, as perceived by most consumers, is the theft, or misappropriation, of consumer CFD that may later be used not only to place fraudulent on-line orders, but also for other secondary purposes, such as placing off-line fraudulent mail, facsimile, or telephone orders, in addition to being utilized as a basis for even more dangerous activities, such as identity theft.

Furthermore, recent increased scrutiny of methods used by various terrorist organizations to obtain funds, equipment and supplies has demonstrated that such organizations frequently engage in fraudulent on-line transactions, CFD misappropriation, and identity theft.

Theft or misappropriation of CFD has always been a problem with conventional telephone (e.g., catalog or television shopping network based orders), and mail-order or facsimile-based commercial transactions, because the customer was forced to provide the CFD verbally to an employee of the merchant, or in writing by sending the CFD as part of an order form through facsimile or by conventional mail.

While in certain areas on-line transactions may offer a greater deal of security for transmission of CFD between a customer and a merchant, the challenge of CFD theft by individuals with external or internal accesses to the merchants' computer systems remains.

However, all of the above approaches suffer from a number of disadvantages that make them cumbersome, expensive, impractical, or otherwise difficult to implement: Required changes in current commercial transaction infrastructure, (which is virtually impossible or impractical), or that add a significant per-transaction expense, such as use of third party secure agents; Required special software and / or hardware for one or more of the involved parties (i.e., customer, merchant, FSP, etc.).

However, this approach requires customers to purchase expensive hardware and to deal with complex biometric software, and has thus failed to capture consumer confidence and approval; and Requiring the customer to memorize any passwords, codes, PIN numbers.

In addition, most of the previously known solutions are limited to on-line transactions only, and thus cannot be utilized to address fraud issues in other types of purchase transactions (e.g., telephone, facsimile, or mail order transactions).

This resulted in banks and other financial institutions having to provide added assurances (promises of insurance coverage for fraud and identity theft) to appease the worried public, while at the same time steadily increasing the cost-per-transaction.

Nevertheless, the vast majority of consumers are still wary of making on-line purchases, and while the growth of Internet commerce is very impressive, it is still far from its maximum potential.

Images